Say good-bye to the traditional family. Here's how the
new demographics will change business and society.

Most Thursday nights,
Hillary Herskowitz slips on her Seven jeans, chooses from among her dozens
of shoes, and steps out for an evening sipping Ketel One and tonics with
the modish throngs of Manhattan. The 35-year-old communications director
and her designer-clad wing girls -- a pediatrician, a health-care manager,
and an executive recruiter -- cruise the city's swankiest bashes: the posh
private parties, the paparazzi-stalked soirees. They don't just watch Sex
and the City. They live it.

But after 13 years of this behind-the-velvet-ropes scene, they have yet to
find the one thing they want most: husbands. The search has taken on a
more desperate flavor of late; the women now plan to haunt sports bars in
their stilettos. "It feels terrifying because the biological clock is
ticking, and I want to have kids," says Herskowitz. "And I never, ever
thought I'd wind up here."

Thirty years ago, a single woman like Herskowitz would have been
considered an aberration. An old maid. Today, she's so typical that the
highest IQs in Hollywood and on Wall Street and Madison Avenue are fixated
on dreaming up products for the swelling ranks of unattached urbanites
just like her. Add to these monied romantics a growing number of gay
couples such as Luke Schemmel and Jonathan Shapiro, who are raising two
adopted kids; divorced parents such as Jason Lauer and Terresa Lauer, who
share custody of their 7-year-old son; single parents like Mark Cunha, a
widower who is raising a son and daughter alone; and young men like
Vincent Ciaccio, who broke his Italian mother's heart when he got a
vasectomy three years ago at the age of 23 because he didn't want to get
tied down. Along with the growing numbers of cohabitants and elderly
unmarrieds, these wildly divergent types are the force behind a huge
demographic shift taking place in this country: We're on the verge of
becoming -- at least in the legal sense -- a nation of singletons.

The U.S. Census Bureau's newest numbers show that married-couple
households -- the dominant cohort since the country's founding -- have
slipped from nearly 80% in the 1950s to just 50.7% today. That means that
the U.S.'s 86 million single adults could soon define the new majority.
Already, unmarrieds make up 42% of the workforce, 40% of home buyers, 35%
of voters, and one of the most potent -- if pluralistic -- consumer groups
on record.

Yet even as marriage is on the wane, infatuation with the institution has
never seemed so fierce -- from the debate over same-sex unions to
President Bush's marriage-promotion campaign to reality TV's depiction of
wedlock as a psychological Super Bowl. The culture may be so
marriage-crazed, though, precisely because the rite is so threatened.
Indeed, we are delaying marriage longer than ever, cohabiting in greater
numbers, forming more same-sex partnerships, living far longer, and
remarrying less after we split up.

What many once thought of as the fringe is becoming the new normal.
Families consisting of breadwinner dads and stay-at-home moms now account
for just one-tenth of all households. Married couples with kids, which
made up nearly every residence a century ago, now total just 25% -- with
the number projected to drop to 20% by 2010, says the Census Bureau. By
then, nearly 30% of homes will be inhabited by someone who lives alone.

This unprecedented demographic shift holds vast implications for
everything from Corporate America to the culture wars; from government
institutions to the legal system. Vast swaths of our social infrastructure
are still modeled on the days when our realities were reflected in
Leave It to Beaver, not Queer Eye for the Straight Guy.
Corporate benefits, pensions, taxes, Social Security, educational funding
-- all were designed in the last century to favor and encourage marital
unions. "There's this pervasive idea in America that puts marriage and
family at the center of everyone's lives," says Bella M. DePaulo, visiting
professor of psychology at the University of California at Santa Barbara,
"when in fact it's becoming less and less so."

So societally ingrained is matrimony that on their wedding day, a bride
and groom become immediately eligible for a bonanza of perks. The notion
that married people lose out because they pay more in taxes through the
oft-cited marriage penalty is only partly true. Dual-income, high-earning
marrieds and low-income couples sometimes suffer the penalty, but for
slightly more than half of all spouses, marriage actually slashes tax
bills, particularly for those with children. That means, for example, that
mega-salary executives with stay-at-home wives get subsidies that single
working mothers don't. "It does seem unfair to me that there are single
people in our exact same situation who pay more than we do in taxes," says
Scott Houser, a tax-code expert and economics professor at California
State University at Fresno." Fixing the marriage penalty is just going to
make the single penalties worse."

Indeed, the elements are in place for a new form of social warfare. That's
because what's occurring is a wealth transfer to the married class, which
imposes an array of unseen taxes on singles -- no matter how many people
they care for or are dependent on them.

In the workplace, unmarried people wind up making an average 25% less than
married colleagues for the same work because of the marriage-centric
structure of health care, retirement, and other benefits, calculates
Thomas F. Coleman, a lawyer who heads the Los Angeles-based American
Association for Single People.

In the civic arena, rising school taxes and growing inequities in pensions
between marrieds and singles represent a big bonus for legal couples. The
unmarried are often subjected to discrimination in housing and credit
applications. They pay more for auto and homeowners' insurance and are
shut out of valuable discounts on gyms, country clubs, hotel rooms -- even
football-ticket lotteries. In some states, unmarried people, perhaps laid
off from jobs and scrounging to pay their bills, are barred from taking on
roommates to help pay the rent.

Outdated Definitions
These silent levies may have seemed less important in the days when most
homes had a working dad and a full-time mom -- and kids largely resided
with their two biological parents. But today, chances are that if you live
to the age of 70, you will spend more of your adult life single than
married. Moreover, a record number of children -- 33% -- are now born to
single parents, many of them underemployed, uninsured mothers. Yet "most
workplaces are still modeled on an outdated definition of an ideal worker
-- someone who works more than 50 hours a week and doesn't take breaks to
raise children," says Joan Williams, co-director of the Gender, Work &
Family Project at the American University Law School. "God forbid if you
are single mother trying to live up to that ideal without a wife."

As the reality of unmarried America sinks in, CEOs, politicians, and
judges will be challenged to design benefits, structure taxes, and develop
retirement models that more fairly match the changing population. Already
in Corporate America, more than 40% of the 500 largest companies have
started to revise their marriage-centric policies, reexamining everything
from subsidized spousal health care to family Christmas parties. Companies
such as Merrill Lynch & Co. (MER
) and Bank of America have (BAC
) have begun to accommodate the shift by instituting "extended family
benefits." These plans allow employees to add a qualified adult household
member to their health plans -- be it a domestic partner, extended family
member, or grown child. American Express Co. (AXP
) is considering a plan whereby employees who are parents pay more for
each kid they add to the health plan. At Xerox Corp. (XRX
), employees now get $10,000 upon joining the company, on top of a
standard benefits package, to spend on whichever programs they choose
rather than having it automatically earmarked for families; at Prudential
Securities Inc. (PRU ),
cohabitants can get health benefits for opposite or same-sex partners as
long as they've been living together at least six months.

Writ large, these kinds of changes could lead to more European-style
systems that de-link marital status from eligibility for social benefits.
Already, a bill is pending in Congress that would make benefits for
household members and domestic partners tax-free, just as they are for
spouses. Another would mandate that the federal government offer health
benefits to domestic partners; in the past few years, Minneapolis, San
Francisco, and Seattle, among other cities, have also passed laws
obligating companies doing municipal business to do so.

The lower marriage rates, combined with declining fertility, also raise
questions -- ones Europe and Japan are already facing -- about whether
smaller future generations will be able to support the growing retirement
and health needs of the huge numbers of older people. Can the country pump
out enough educated workers to supply the labor force with the talent it
needs to keep productivity strong? Will minority groups and immigrants,
who tend to have higher fertility rates, gain more power? The answers to
these questions will shape social policy and force corporations to rethink
their human-capital strategies, product lineups, and marketing missions.
Because unmarried America has such diverse constituencies -- from urban
swingers to straitlaced widows -- it will also mean more micromarketing to
cater to these finely tuned population segments.

Rumblings of a Backlash
The tensions between traditional families and the new households are
already starting to spill out all over society -- in offices,
neighborhoods, and political campaigns. Pollsters Celinda Lake and Ed
Goeas say the marriage gap could become an issue in the 2004 Presidential
campaign since George W. Bush draws so much of his support from the
wedded, who give him approval ratings 15 percentage points higher than the
single or divorced. Meanwhile, the numbers of Democratic-favoring singles
continues to grow in number and power. There are also rumblings of a
political backlash as nontraditional families balk at lopsided tax
burdens. Dual-income, kid-free cohabitants, and elderly retirees on fixed
incomes, for example, are joining forces to oppose school bond issues, a
growing argument now that only 20% of the electorate has children.
Charlotte Ness, a 55-year-old childless single, fumes about the way she
pays the same school taxes as the married couples in her Vienna (Va.)
neighborhood but will only get half the capital-gains break on the sale of
her home. "It's nothing other than theft by a government of married
people," she says.

Some singles are challenging zoning laws that limit the number of
unrelated people who can live together, while others are forming homeowner
associations that ban kids. Then there are those who are working to bar
travel-industry practices that force them to pay 40% to 100% more for
single-occupancy hotel rooms as well as auto and health-club rules that
limit discounts to spouses. "You never used to have this," says David
Popenoe, co-director of the National Marriage Project at Rutgers
University. "Those without children and those who aren't coupled have
begun to mobilize much more than they did in the past."

Also fueling the demographic change: More people are coming out of the
closet and setting up same-sex households. And most everyone, on average,
is living longer, which will make for an expanding population of widows as
boomers age. Meanwhile, more seniors are divorcing so they can qualify for
Medicaid, while others are living together instead of remarrying to avoid
losing pension-survivor or health benefits. "Sometimes you have to break
the rules to make a living," says 64-year-old Darlene Davis, who lives
with her boyfriend of 19 years, Cary Cohen.

Marrying Cohen would mean losing her deceased husband's health benefits,
which she relies on as a heart-attack survivor with three stents. Last
year, the state of Virginia refused to renew her day-care license because
of old laws on the books that classify cohabitation as illegal. But after
the American Civil Liberties Union took up the case, officials relented.
"In the spiritual sense, we are husband and wife," she says. "But the law
just doesn't see it that way."

Neither does the workplace, where singles get less and pay more. Married
people often make more than unmarrieds, with married men earning an
average 11% more than their never-married male colleagues, according to
the Federal Reserve. The unmarried, most importantly those with kids, also
suffer higher unemployment. And aside from subsidized health coverage for
spouses, there are plenty of other inequities. Social Security is one of
the biggest redistributions machines there is: Married and unmarried
co-workers pay the same amount in employment taxes, but married people can
leave their Social Security benefits to surviving spouses, while the
unmarried can't leave them to surviving partners.

Pension Penalties
That's one reason why, given the gender pay gap, single working mothers
often end up with far less in their old age than lifelong homemakers;
one-earner married couples receive average benefit returns that are up to
85% higher than those of single males; and African Americans, who have low
marriage and life-expectancy rates, sometimes end up subsidizing the
retirement benefits of millionaire whites. In fact, one of every three
black male youths will pay for retirement benefits they will never see.

Pensions also certainly come with big penalties for singles. If a married
worker dies before starting to receive the benefits, a surviving spouse
can inherit them. For singles, they go back into the pot. April Murphy, an
unmarried 38-year-old who has worked as a flight attendant for American
Airlines Inc. for 11 years, found this out when she tried to name her
sister as her designate on her traditional pension. The company told her
that was fine. But if Murphy dies even one day before her retirement, her
sister won't see a penny. "When I'm pushing a beverage cart, the flight
attendant on the other end is getting more just because she has a spouse
or child or two," says Murphy. "How can you compensate one employee more
than the other?" Murphy was also stunned to learn that she had no legal
recourse: Federal anti-discrimination laws protect just about every class
-- race, religion, gender, age -- except the unmarried.

Although marriage and fertility rates are at their lowest point in history
across the industrialized world, an estimated 85% of Americans will still
marry at least once in their lives -- even though that is a huge drop from
the historic high of 95% in the 1950s. Though Rutgers' Popenoe believes
that marriage rates will continue to slide, there are some countertrends
that could tilt the statistics back toward a married majority. An
unforeseen legalization of gay marriage or an even bigger surge in married
immigrants -- who are already propping up population growth -- could
dampen the trend. Hispanics, the fastest-growing minority group, tend to
have higher rates of marriage, given their religiously rooted family
values. Some demographers point to a late-1990s leveling-off of divorce
rates and the numbers of kids living with single parents as evidence that
the institution may be approaching a turnaround. But most chalk this
development up to the booming economy and welfare reform. Nothing less
than a massive return to traditional values, they argue, will reverse the
trend.

Judging by the attitudes of young people, that seems unlikely. Fully 54%
of female high school seniors say they believe that having a child outside
of marriage is a worthwhile lifestyle, up from 33% in 1980, according to
the University of Michigan Survey Research Center. And 40% of female
twentysomethings would consider having a baby on their own if they reached
their mid-30s and hadn't found the right man to marry.

What was once a frowned-upon alternative has become the mainstream. Since
1970, the ranks of the never-married and the childless have surged
astronomically, according to the Census Bureau. There is also a creeping
disconnect between marriage and child-rearing, with an 850% increase since
1960 in the number of unmarried couples living with kids. As for children,
40% of them will live with their mom and her boyfriend before they turn
16, according to the National Institute of Child Health & Human
Development.

Certainly, there are scores of reasons to encourage marriage. Social
research suggests that it is one of the republic's great stabilizers.
Living with two happily married parents is the best shot a kid has for a
successful launch in life. Marriage attaches fathers to children and
protects adolescents from the scourges of addiction, suicide, teen
pregnancy, and crime. Matrimony also offers families a layer of economic
protection in an era when demands for individual competence and
educational achievement have never been greater; when even members of the
middle-class face slippery job security, diminishing benefits, and bidding
wars for houses in the ever-dwindling number of good school districts.

Looser Ties
But just because matrimony is good for society doesn't mean that outmoded
social benefits are -- especially when so many kids are not living in the
kinds of traditional households that current social policies favor. As
more and more companies begin to loosen the connection between benefits
and marriage -- and partners who act like they are married are treated as
if they are -- it's likely that there may be even higher rates of
cohabitation and even lower rates of marriage, as has already happened in
Europe. The difference, though, is that European countries have stronger
social safety nets in the form of long, subsidized maternity leave
policies; good part-time jobs for mothers; and tight-knit extended
families, who help care for children born to single parents.

In America, the debate over the relative prominence of unmarrieds and
marrieds is likely to grow more complex and caustic as the tipping point
nears. Some say that the country is sliding down a slippery slope, gutting
one of the last social safety nets that exists. Critics warn of an
atomized society of subgroups, each vying for its selfish interests, with
children the ultimate victims. But others say that given the demographic
trends, what's needed isn't a nostalgia for the past but a rethinking of
our notions of relationships, parenting, and family. No matter how the
politics play out, the demographic convulsion is certain to cause a
collective reexamination of what it means to be full-fledged members of
society. No matter if you think that's for better or worse, husbands and
wives no longer have a monopoly on that.